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India will gain a few notches as an investment destination: Snehdeep Bohra, Fitch Ratings

Increased investments in India could help bridge the fiscal gap resulting out of tax cut

ET Now|
Sep 21, 2019, 10.22 AM IST
Snehdeep Bohra-Fitch-1200
There will be a clear and direct impact of the corporate tax cut on the fiscal math of the government, there would also be an increased buoyancy in tax collection, says Snehdeep Bohra, Associate Director, Fitch Ratings. Excerpts from an interview with ETNOW.

What is your reaction on the way the market has reacted to the big corporate tax booster announced by the finance minister?
My view is that this is a positive step. This will boost the companies’ financial flexibility because it will leave more cash in corporates’ hands. In terms of how this cash is being deployed, it is fair to say that some part will be deployed to boost the investment and that is how it will have a positive impact on the growth profile as well as in terms of boosting the overall demand in the economy.

One of the worries has been how will the government fund this?
I am not a sovereign analyst but I can answer this in the general context. There will be a clear and direct impact on the fiscal math of the government but as the finance minister said there would also be increased buoyancy in tax collection.

More importantly, as an investment destination, India will gain a few notches. That way, increased investments in India as a destination could help bridge the fiscal gap resulting out of this announcement.

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